China’s crude oil imports increased to 12.1 million barrels per day in March, a rise of 1.7 million barrels per day from earlier in the year. This volume is nearly 5% more than the previous year and marks the highest import volume in over 18 months.
A substantial increase in oil imports from Iran, though not officially documented by China, is considered a factor for this rise. The data provider Vortexa highlights increased shipments from Iran and a noted rise in oil imports from Russia.
Possible Decline In Future Imports
However, the expectation is that oil imports may not continue at the March levels. The reduction in Chinese oil product exports, due to lower export quotas, indicates a potential decrease in crude oil processing and imports in coming months.
This recent surge in China’s crude oil imports, reaching 12.1 million barrels per day in March, represents a month-on-month rise of 1.7 million and the highest monthly figure we’ve seen since late 2022. Year-on-year, it’s a 5% gain—pointing towards strong activity at refineries and the possibility of stockpiling or reselling strategies earlier in the year. That said, this spike looks increasingly unsustainable.
A considerable share of this uptick appears to come from undisclosed imports from sanctioned sources, particularly Iran. While Beijing has not officially acknowledged these flows, vessel tracking data points in that direction. Vortexa notes a sharp rise in volumes from Iran, along with deliveries from Russia that remain elevated. Tehran-sourced oil often arrives by way of opaque routes—via intermediary destinations or with ship-to-ship transfers designed to bypass visibility—but these barrels still make their way into China’s refining system.
This becomes notable because, while March figures point to aggressive buying, it hasn’t translated into expanded finished product exports. In fact, exports of refined products have started to drop off as Beijing pulled back on quota issuance. That’s the key here: lower product outflows mean refiners could be anticipating weaker margins or cooling domestic demand. Alternatively, they’ve already built (and possibly overbuilt) inventory buffers.
Market Implications Of Current Trends
For us in the derivatives sphere, the implication is twofold. Firstly, the short-term data point around import volume is less valuable than usual—it’s an outlier amplified by unofficial sources and a potentially front-loaded buying pattern. Secondly, when export quotas come down, it typically suggests internal balancing. If throughput drops as expected, and demand doesn’t accelerate domestically, then futures tied to heavy imports may correct.
What this tells us is to be wary of extrapolating March’s figures forward. The divergence between stronger imports and weaker product exports creates a lag in market signals and, likely, overstates demand strength in the near term. We should be cautious with outright positions linked to sustained high intake assumptions. Delta exposure may need trimming on continuous or directional bets based on refinery throughput holding up at March levels.
Also worth adding: margins matter. If refinery margins continue to narrow under quota pressure, discretionary processing becomes much less attractive. This would further suppress crude demand domestically—and it’s already something we’ve seen happen during previous clampdowns.
Looking at product spreads, the narrowing of the gasoline-diesel crack should not be ignored. Tighter margins combined with reduced export relief means refiners might be forced to adjust runs or shift focus away from exports altogether.
The geopolitical weight of this Iranian supply shouldn’t be discounted either. While cargo volumes remain technically off-limits under sanctions, the fact they are flowing unimpeded into Eastern markets suggests a trading pathway capped only by diplomatic bandwidth. But this level of buying can’t continue unnoticed forever—and any increase in Western pressure or enforcement would reshape available supply routes.
We find ourselves in a market where official data trails actual flows. It reinforces the value of ship tracking and customs inference in forward positioning. Use caution in interpreting demand indicators based solely on headline import numbers. They’re not wrong—but they’re incomplete.
This divergence between elevated imports and soft product exports isn’t noise—it’s the drift that gives early cues. So we plan our week accordingly.
